UPDATE: Wedbush Downgrades Durata Therapeutics to Neutral, Reiterates $13 PT as CBST/Hospira Litigation Overhang Looms

In a report published Monday, Wedbush analyst Gregory R. Wade downgraded the rating on Durata Therapeutics DRTX from Outperform to Neutral, but reiterated the $13.00 price target. In the report, Wedbush noted, “With the stock nearing our $13 price target and the CBST/Hospira Paragraph IV litigation creating a heavy overhang on the future IV serious gram-positive antibiotic marketplace, we believe it is appropriate to move to the sidelines on DRTX. Oral arguments in the CBST/Hospira Paragraph IV litigation begin in January. We view the present litigation and potential CBST settlement or loss to Hospira as a significant overhang on the long-term value of the IV serious gram-positive antibiotic marketplace in which DRTX's dalbavancin will compete. CBST's recent Phase III pipeline product success may make the company more willing to settle with Hospira on similar terms as those agreed to with TEVA, which would see 3 competitors in the marketplace and daptomycin's price likely dramatically degrade beyond mid-18, creating significant competitive headwinds for dalbavancin. CBST's prevailing in the courts could be a positive catalyst for DRTX in H2:14.” Durata Therapeutics closed on Friday at $12.32.